4 Smart Tips On How To Protect Yourself From Fraud In Blockchain
The bullish explosion of bitcoin from mid-February to mid-May this year (2021) has made a lot of people invest in blockchain projects. Unfortunately, a good number of these investors have lost their money to fraud projects. These frauds are still lurking, mostly in the internet, waiting to pounce on the next target.
We need to be very cautious when investing in blockchain projects. Not every crowdfunding token is genuine, as some are frauds aiming at stealing from unsuspecting crypto investors. But how do we avoid getting scammed?
In this article, I’ve put together experts tips on how to protect ourselves from fraud in blockchain.
#1 Understand the Blockchain Project
Don’t rush in to invest in a token. Research the blockchain project thoroughly before committing our money. Establish whether the project is researched and found viable. If it is a decentralized finance blockchain project (DeFi), has it been approved by financial experts? If yes, who are the experts? These questions will help us avoid investing in fraud.
#2 Who Is Behind The Project?
The team behind the project can tell us much about the blockchain project. Team reputation matters. For example, if the lead or some members team have been part of other successful projects, we can trust the project. Knowing the team will also help us identify serial frauds.
#3 Type Crowd Funding
How the token being sold to investors also matter. ICOs have been marred with frauds and thus not recommended. Initial exchange offering (IEO) is the safest way of investing in crypto tokens today. However, the IEO must be overseen by a reputable exchange.
#4 Avoid Too Good Deal
When the deal is too good, think twice. If the blockchain investment promises quick and huge returns or impersonates celebrities or renowned persons, they are most likely to be a fraud. Avoid such projects.
With these tips, we’ll be able to make an informed decision when investing in cryptocurrencies.
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